Benefits of IoT article written for Supply Chain Game Changer by, and permission to publish here provided by, Michael Dehoyos.
The Internet of Things (IoT) is a network of physical devices and objects that are connected to the Internet and sometimes each other. This is a network that’s getting bigger and bigger every day.
They are connected via sensors and they can collect and exchange information about how they’re used and what’s around them. IoT is poised to have a big impact economically and socially, so this article will outline the benefits it has on supply chain management.
IoT and Supply Chain
Supply chain management is the link between every stage of production of a product. Every connection needs to be strong, because a failure somewhere, like a transport delay, old machinery, or operational mistakes can cause higher costs and therefore lower profit margins.
IoT’s network of sensors and information sharing contributes to the supply chain as a useful link between the objects and the data. It is then transmitted over the Internet to provide useful analytics and decision-making power to any business.
Whether the supply chain is for individual products, warehouses, shipping containers, or even oil pipelines, the use cases and benefits are endless. Here, we’ll explore 6 of these benefits.
1. Inventory Tracking and Improvements
Devices that are part of the IoT help manufacturers track all their necessary parts globally, in real time. By using Radio Frequency Identification (RFID) tags on their parts, manufacturers will be alerted about their components’ arrival dates.
This helps them better manage product levels in their inventory and optimize it for better efficiency in all their locations. They can also share with their customers up-to-date shipping times and delays. They can also trace goods that are finished so they can track any product recalls.
The main risk here to be aware of is if there’s a breakdown in tracking tech using RFID tags, so in the event of a product recall it may become more difficult to locate and retrieve products.
2. Greater Transparency Through the Supply Chain
Customers are more and more interested in choosing products that are made sustainably as well as ethically in every part of the production chain. Because of that, transparency at all stages of the supply chain is essential.
The more visibility people have in the supply chain, including businesses, the better chance it stands to function well. As many as 70% of companies experience a supply chain interruption every year, so by using machines and devices that are connected to the IoT, any issue or obstacle can be communicated clearly for greater efficiency.
3. Temperature Tracking on Cold Chain Transports
Cold Chain Monitoring is when businesses can track in real-time the temperature of their food items, perishable products, and eatables to ensure freshness and quality. According to Joshua Virtue, a supply chain expert at Australia2Write and Next Coursework, “by using predictive and descriptive analysis in real-time, the business is better equipped to meet its standards. In fact, not only can this improve the temperature but also humidity levels, and alerts on any issues can be sent in real-time along with location and stage of transport.”
4. Predictive Maintenance
Another great benefit with IoT sensors is finding out when machines should be maintained based on heat, humidity, vibration, and other data points. This allows businesses to schedule repairs during planned downtime instead of waiting for a machine to fail, possibly during a production run at the worst time ever. This is useful because it also saves on maintenance costs and increases profit margins and limit the issue to one machine instead of the whole supply chain.
The risk here is that sensors aren’t always reliable at this point because it can malfunction and compromise a finished product’s quality. Companies therefore need to pair technology with human verifications.
5. Better Fleet Management
Jack Billy, an IoT writer at Brit Student and Write My X, explains that “IoT can give real-time insights in the fleet’s operation and environment. By connecting the fleet to IoT, companies can keep their transport on the road longer, provide their customers with real-time tracking and ETA, and lower costs.”
6. Improved Last-Mile Deliveries
The last mile is the key step in the supply chain for a product because it has the biggest impact on customers and getting repeat orders. IoT devices can give information so companies can optimize their last-mile delivery.
The impact of IoT on supply chain is just starting, and the next few years will see the benefits grow in leaps and bounds.